Kamal Nath hopeful of resolving EU issue

FOR ENDING BARRIERS: The European Union Trade Commissioner, Mr Peter Mandelson, and the Minister for Commerce and Industry, Mr Kamal Nath, after the bilateral talks in the Capital on Friday. Kamal Narang

Our Bureau

The EU's contention is that India maintains a tariff and tax system that is not in line with the international commitments.

New Delhi, Nov. 17

The Commerce and Industry Minister, Mr Kamal Nath, on Friday expressed hope that a "satisfactory solution" would be found to the issue of alleged trade barriers maintained by India on imported wine and spirits from the European Union (EU).

Some months ago, the EU had conveyed to the Indian Government that it plans to approach the World Trade Organisation's dispute settlement body over the trade barriers maintained by India on imported wine and spirits. It, however, had not called for formal consultations on this issue.

EU contention

The EU's contention is that India maintains a tariff and tax system (in respect of wine and spirits) that is not in line with the international commitments.

"We are continuing our discussions with the EU on this issue. It was discussed today and would be discussed tomorrow. We have some concerns not merely in terms of revenue but also in terms of reciprocity. I hope this would not go to the dispute settlement body," Mr Kamal Nath told newspersons after his bilateral talks with the EU Trade Commissioner, Mr Peter Mandelson, here on Friday

Mr Mandelson said that discussions were on and pointed out that the EU had so far not called for any consultations with India on this issue. He highlighted that the issue of "dispute" could arise only after formal consultations and then only the dispute settlement body could be approached.

Meanwhile, Mr Mandelson said that both India and the EU agreed to begin negotiations in due course on a wide-ranging trade and investment agreement.

He said that the High Level Trade Group would meet on December 14 and 15 to take this forward.

Trade, investment pact

The EU Trade Commissioner indicated that the signing of the comprehensive trade and investment agreement between India and the EU would take at least two years from the date of the launch of negotiations. He also said that this agreement would be a building block for the WTO agreement. On bilateral trade between India and the EU, Mr Mandelson said: "Our trade is doing well, but it can do much better for the mutual benefit of both India and Europe".

At Friday's bilateral talks, both sides renewed their joint commitment to the WTO. Mr Mandelson said that resumption of work in Geneva was necessary and welcome. He highlighted that the direction that the US takes on farm subsidies was pivotal to rest of the agricultural negotiations and the rest of the Doha talks.

(This article was published in the Business Line print edition dated November 18, 2006)

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